Cash support for firms forced to close doesn’t scratch the surface, MSPs told

Financial help for businesses forced to close as Level 4 coronavirus restrictions come into force across large parts of Scotland will not even “scratch the surface”, a Holyrood committee has heard.

Liz Cameron, director of the Scottish Chambers of Commerce, criticised the Scottish Government over the amount of cash being made available to firms such as non-essential retailers and those in the hospitality sector.

With the toughest tier of coronavirus restrictions being imposed on 11 local authority areas across Scotland from 6pm on Friday, many businesses will have to shut.

Ms Cameron told the Covid-19 Committee: “I’m not convinced that this constant closing businesses down is the answer, because it is quite clear where the pinch-points in the growth of the virus are, and that is in the home environment, where unfortunately none of us have the real levers to be able to close homes down.”

She said business owners feel “desperate” and “disillusioned”, as she also warned travel restrictions being made legally enforceable from Friday will also have a “major, major impact” on the retail and hospitality sectors.

The legal changes will mean people living in areas under Level 3 and Level 4 restrictions will be breaking the law if they travel outside of their own local authority without good reason.

Speaking about the impact the latest restrictions will have on businesses, Ms Cameron said: “Many of them now will not be able to put our lights back on after these additional lockdowns.”

A survey by Scottish Chambers of Commerce found more than two-thirds (68%) of respondents feel the financial support is “not appropriate and didn’t even scratch the surface in terms of a number of businesses that are entering their second or third lockdown”, she added.

Her message was echoed by Willie Macleod, executive director for Scotland of industry body UK Hospitality, who told MSPs: “There is no doubt hospitality businesses are in really deep trouble.”

He said businesses such as music venues, conference centres and nightclubs had not been able to reopen at all since the start of lockdown in March.

Mr Macleod said: “Every pound that government, whether Holyrood or Westminster, allocates to our industry is welcome, but the sad fact is even with support through a 100% relief on business rates, a reduction in VAT, we are still in trouble. Our revenues are not growing, our cash flow is really in dire straits.”

He said the grants closed businesses have received amount to between £1,500 and £4,000 for every four-week period – but over a month a medium-sized pub would have fixed costs amounting to £6,000-£10,000, while for the average hotel that would be £62,000.

The head of the Scottish Tourism Alliance told how many hoteliers now have “no option but to close”, adding that for some this will be for the three weeks Level 4 restrictions will be in place for, but for many it could be “well into the new year” before they reopen.

Chief executive Marc Crothall said hotels are in a situation “where their footfall is largely wiped out due to the travel restrictions and the fact that alcohol can’t be served in the majority of hotel restaurants.”

He added: “The hotels I’ve spoken to have told me that the cancellations are already flooding.

“This is undoubtedly the most desperate time for our industry since the crisis unfolded, with all businesses keen to learn the detail of the Scottish Government’s support package.”

Ms Cameron also told MSPs that while First Minister Nicola Sturgeon had announced an additional £30 million of funding to help businesses when she confirmed Level 4 restrictions are being imposed, no details are yet available on how to access this help.

“Businesses this morning still did not know how to apply, still did not know the process to apply,” Ms Cameron said.

“The possibility of the funding hitting business may not happen for another few weeks, businesses can’t wait that long.”